In a recent article, the MBA forecasted mortgage trends for 2010 interest rates, mortgage refinancing activities and more.  According to Mortgage Banker Association’s Weekly Application Survey, thirty-year mortgage loans with fixed rates dropped through November, falling 18 basis points relative to the month prior and ending November at 4.79 %.  Fifteen-year home mortgage rates reached a new record low for the survey of 4.27%.  The percentage of borrowers selecting the 15-year has risen in 2009 as a result of the widened spread between 15- and 30-year home loans.  MBA forecasts that 30-year mortgage rates will rise through 2010 to end the year at 5.7%. In addition to conventional loans, MBA believes that both VA and FHA mortgage rates will rise a percentage point between now and 2011.

On a seasonally adjusted basis, home purchase loans applications declined almost 20 % from October to November.  Mortgage refinance applications rose by about 1% over that time.   MBA projects that mortgage loan originations will decrease from almost $2.0 trillion in 2009 to about $1.5 trillion in 2010.  MBA forecasts that purchase originations will increase from $718 billion in 2009 to $804 billion in 2010, while refinance loan originations are projected to fall from $1.246 trillion to $693 billion. The Federal Reserve and U.S. Treasury home loan programs continue to dominate the secondary market.  In November, Federal Reserve purchases of agency MBS accounted for about 80% of new MBS issuance from Fannie Mae and Freddie Mac.